Sunday, February 23, 2020

[FOI request] Inside Transdev's 302 and 304 bus upgrade business case


Last September I wrote about bus routes 302 and 304 from Doncaster/Box Hill to the City via the Eastern Freeway. These services were becoming increasingly crowded with frequent complaints from passengers inconvenienced by cancelled services and buses too full to pick them up.

Passengers got together to achieve the following:  

* A Facebook support group established to advocate for improvements. 

* Support for service upgrades expressed in Parliament and elsewhere by local MPs Tim Smith (Kew) and Paul Hamer (Box Hill)

*A Freedom of Information request from Philip Hodgkinson requesting documents in relation to issues with Routes 302 and 304

These efforts have had at least some success. PTV announced some extra peak services starting in November 2019. However this is only a stop-gap measure and more is needed.

Bus operator Transdev was very aware of issues facing the 302/304 during this time. They prepared a business case explaining why an upgrade was needed. This suggested how extra morning peak capacity could be easily and economically added. It was obtained through Freedom of Information a few days ago. 


Getting it proved quite a drama. Even though it's our money they're spending, the Department of Transport and its ministers can string FOI requests out for months. DoT's annual report (page 231) discloses how many requests were received but not how many were dispatched on time.

Network management in other cities

While I wouldn't swap Melbourne's extensive network for what most North American cities have, their transit agencies often have amazingly open attitudes towards administration and data. For example outsiders can read about what happens at transit agency board meetings or even watch proceedings on YouTube.  And cities like Portland, Oregon publish detailed quarterly cost and ridership reports for each route (below).


I suspect this is partly because there is more active management of transit resources elsewhere than here. Funding is more precarious, especially in the US. For example reductions in sales tax revenue can precipitate cuts in service. Not exactly conducive to having a stable service you can rely on.

US cities may seek federal funding for transit projects. They also use referendums to authorise increased funding on new lines or services. Winning such votes obligates transit agencies to publicly advocate for services and infrastructure in a way that our meek public servant types only do behind closed doors (if at all). US transit agencies rarely recover much of their costs from the farebox so receiving state revenue is essential. But they operate in a politically competitive environment with numerous other special interests pleading their slice of the tax revenue pie. If they don't advocate they don't get and may have to cut service (as has been common recently in the US and UK).

A different type of pressure applies where farebox revenue is more significant or you give bus operators more autonomy. Then it's commercial more than political pressure (although you can never entirely take the politics out). Imperatives to increase patronage are greater either because of increased direct revenue or contract incentives. Examples include bus operators up to the early 1970s (when public subsidies started) and the commercial rail franchises in the UK. Also to some extent services in New Zealand where a 50% farebox recovery ratio is mandated. In all these cases there is pressure to trim costs and adjust services in a direction that maximises profitability (often while also meeting politically decreed minimum service and reliability standards).

The Transdev bus franchise contract signed in 2013 is the nearest recent example Melbourne has had of this approach. This promised a new era for bus services. It has payment incentives for increased patronage, even mandating a 'greenfields network'. The contract hasn't changed but other critical things, such as the minister's willingness to veto a proposed network, were greater than imagined. Hence there has been only small changes since the minister rejected Transdev's 2015 greenfield network proposal (partly for sensible reasons).

Success here requires knowledge of a network's costs and awareness of opportunities to boost profitability or ridership. Plus a supportive bureaucracy and pro-reform public transport minister of the type we haven't had since 2014.

It's important though to be aware that maximum profitability does not always coincide with maximum ridership; a network that optimises profitability (ie overloaded buses) usually offers a poorer service than one that maximises patronage. However when wider community benefits of greater transit access are considered the latter is often preferable. Plus returns on capital are increased when your patronage increase is obtained by working your existing bus and train fleet harder.

An overall network view is also essential; having bus operators independently seek to maximise patronage may lead to wasteful duplication in some places and poor service elsewhere if they can  'cherry pick' profitable routes. Hence the need for a strong planning agency such as the original concept of PTV. Although even this was undermined by the separate (but ultimately ill-fated) planning Transdev was doing for its greenfields network.

Unlike in other cities, Melbourne's buses appear to be under little political, financial or commercial discipline to do better. Coming from consolidated revenue rather than being a hypothecated percentage of a particular tax, our funding has been more stable than in US cities. The main financial discipline appears to come every seven or so years when we renegotiate contracts with private bus operators (as done in 2018 after some argy bargy). Service is expensive to provide but interest in optimising resource use on both underproductive or overproductive routes is low, despite required data known to exist.

Our politics are also different. It lacks Americans' vigorous local campaign and referendum culture.  Modern bureaucrats are under the thumb of the minister with little independent professional authority unlike the VR or MMBW of yore. For a while it looked like we were returning to something like that with PTV Mk1 but this proved short-lived (although some great bus reform happened during this time).

Contracted operators tend to be fairly quiet (in public) and we haven't heard much lately from industry bodies such as BusVic. They had bus upgrade proposals before the 2018 election but these were not widely promoted or always well targeted. In a policy area like health industry or professional associations like the Pharmacy Guild, the AMA or the Royal Colleges would lobby for or against significant changes. Whereas in transport opinions from industry, engineering or planning professional associations carry little weight, especially when it comes to services (though you hear more from them when it comes to infrastructure).

The pressure on public transport ministers to perform seems less than in the troublesome 2007 to 2011 period but I suspect that it is building again following renewed issues with service delivery, outbreaks of industrial disputation and  over-runs on major projects.

With the possible exception of Transdev's contract (the oversight of which has had problems with a major fleet management crisis), we have had no enforced cuts that required savings to be found. Neither has there been a recent public-domain bus plan with ministerially endorsed service or patronage targets to encourage network reform. Without this urgency there has been little drive to pursue widespread cost-effective bus network improvements despite these being needed to meet the challenges of population growth. Instead our buses stagnate with barely half the patronage of trams despite them serving vastly more homes, jobs and destinations. And people miss out on the opportunities that a job-ready network could unlock.


Inside the business case

The first thing I'll say is you should read it. It gives an insight into planning and processes that's rarely seen. As well as background on other routes Transdev run. Also apparent is sensitivity over redacted financial information, especially when compared to what other jurisdictions allow to be published.

The business case starts by defining the scope. That's confined to the morning peak. The afternoon peak is not addressed. Neither are other issues concerning Route 302/304 such as the latter's short weekend operating hours.

A major reason for the 302/304 being worthy of a service upgrade is its strong patronage. It's more popular than most other Melbourne bus routes. Also noted is that overcrowding is leaving people behind at stops and affecting punctuality.

Rising complaint volumes are also cited. 8.6% of service delivery complaints relate to the 302/304 despite these comprising only 3% of Transdev services. That's a complaint rate of nearly three times the average. And it's rising as a ratio of all complaints Transdev receives.

The document then talks about how services can be quickly and economically added. There is criticism of PTV's convoluted service change process for adding timetabled trips. Transdev suggest bypassing this by adding 'ghost trips'. That is trips that run but don't appear in the public timetable. This can work on routes sufficiently frequent that they can be used as a 'turn up and go' service. Route 302 and 304 during the peaks would qualify for this.

One of the solutions suggested is to more intensely use buses used on school trips during school days. These could run short trips starting at East Kew in to the city and relieve some crowding.

It is here that we find our first redacted item. It is apparently a diagram of vehicle blocks. It is understood that information to do with bus scheduling and staff rostering is often considered commercially sensitive within the industry. This is because ingenuity here can give companies a cost saving edge when tendering for business. Bus operators regard this as part of their intellectual property that they would not wish disclosed. Cost information has also been removed.


A place where resources could be gleaned for additional 302/304 trips were the November changes to bus routes in the Elsternwick area (216/219/220). These routes were poorly used. The proposed network changes (leading to the creation of the new 603 and 604) would apparently save buses. I wrote about them here.

Route 273 was also mentioned. This operates every 10 minutes in the am peak and every 20 minutes in the pm peak. Usage is very low. Morning trips could be pulled off this route (saving two buses) to shift capacity where it is more urgently needed on the 302/304. This would have to go through PTV's service change process which the business case says requires a minimum of 9 months. That brings us to about the second quarter of 2020. So much for buses being a responsive and flexible form of transport!

To summarise the business case advocates for some weekday morning upgrades to Routes 302 and 304 to relieve crowding. It suggests 'ghost buses' to provide quick improvements. Later it suggests the use of resources from other underused routes to enable added timetabled trips. However these would take longer to add due to PTV's service change process.

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